CHICAGO, July 31 (Xinhua) -- The Chicago Purchasing Managers Index (Chicago PMI), also known as Chicago Business Barometer, eased further to 44.4 in July from 49.7 in June, the second sub-50 reading in 30 months.
Meanwhile, two in five U.S. firms believe now that the economy may see slower growth in the second half of 2019.
The index report released on Wednesday said that four of the five components were in contraction territory in July, with only supplier deliveries above 50.
"Sentiment faded further with firms facing weakness across the board," said Shaily Mittal, senior economist at MNI, who helped compile Chicago PMI data.
Mittal contributed the downbeat PMI to "global risks, trade tensions, slowdown in demand and sombre growth expectations," which have jeopardized business conditions.
"Firms are not panicking yet, but the latest report isn't adding to the cheer. The above risks lend weight to a monetary easing approach by the Fed, albeit a gradual one," Mittal added.
In July, the production indicator fell 22 percent, reaching a 10-year low. Demand remained muted, highlighted by the new orders indicator that subsided further into contraction, according to the report.
Order backlogs remained below 50 for the third consecutive month, although it rose slightly on June's reading.
Weaker demand and production led U.S. firms to adjust their workforce. The Employment indicator fell into contraction for the first time since October 2017 and hit the lowest level since October 2009.
In response to this month's special question about the U.S. economy's growth in the second half of the year, two in five firms expected the economy to see slower growth than currently, with some holding tariffs responsible for the slowdown.
Meanwhile, 46 percent firms did not expect any change and only 14 percent expected the economy to pick up.
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